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Apple X Factor: China Consumers Wowed by New iPhone, But Will They Buy?

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Iphone X
Attendees use new iPhone X during a presentation for the media in Beijing, China,
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SHANGHAI/BEIJING: Gu Xiaomeng, a 24-year-old primary school teacher in the eastern Chinese city of Suzhou, says she’s excited about the new iPhone X, set to go on sale Friday. The challenge for Apple Inc is to persuade her to actually buy one.

“I’m definitely interested, but don’t currently plan to get one,” said Gu, whose monthly salary of a little over 6,000 yuan ($905.36) is less than the anniversary model’s starting price in China of 8,388 yuan.

For Apple, which is looking to rev up sales in China after several quarters of declining revenue there, the test is that Gu is not alone. While interest in the phone is high, that won’t necessarily translate into sales.

“Price appears to be a major constraint on iPhone X demand, particularly in China,” Bernstein analyst Toni Sacconaghi said in a recent report that showed three-quarters of Chinese respondents were excited by the upcoming launch, but only a quarter said they planned to buy one.

Investors are keen to gauge Chinese demand for the iPhone X, as it is key to reviving Apple’s fortunes in the world’s biggest smartphone market where it has lost some of its sparkle — and market share — as local phone makers have advanced.

The cheaper iPhone 8, which hit the market in September, has faced sluggish sales, but Apple has said that pre-orders for the iPhone X have been “off the charts.”

Apple, due to announce quarterly earnings Thursday, said it had no immediate comment.

Chatter online on popular Chinese social media platform Weibo also signaled high levels of interest in the new model, though still generally behind levels around the 2014 launch of the very successful iPhone 6.

Apple “geeks”

Xiao Ming, 32, who works for a blockchain start-up in Beijing, stayed up half the night when pre-sales of the iPhone X opened last week. He has also bought the iPhone 8.

“I always try to be one of the first to buy any new iPhone,” he said, adding he likes the new phone’s augmented reality and facial recognition features. “I’ll be very disappointed if I don’t get one on the first day.”

While he plans to buy the new phone, he noted many of his friends were less fussed. “Before, I think a lot of people would try to get it somehow, now it’s mostly the geeks,” he said.

“My friends don’t mind so much if they have an iPhone 8 or a 6, for example, because it looks similar and the price [of the iPhone X] makes you feel nervous.”

Re-sellers and iPhone accessory makers generally agreed there was a buzz about the iPhone X, Apple’s first phone to have a full-screen display and functions such as facial recognition security.

“People are really anticipating this phone because it’s the 10th anniversary version and it has more changes and modifications,” said Gary Yiu, manager of the iGeneration smartphone shop at one Hong Kong mall.

Iphone X
An attendee uses a new iPhone X during a presentation for the media in Beijing, China.

Yiu and three other phone re-sellers there said they had seen strong demand for the phone from mainland clients.

A merchant at the Huaqiangbei electronics hub in Shenzhen, who was offering an iPhone look-a-like called the “E-Feng X” from 1,599 yuan, said sales volumes were “very good.”

Some Chinese re-sellers, however, said they already canceled pre-orders for the iPhone X, concerned there wouldn’t be enough of a supply bottleneck to allow them to charge a steep premium — despite some worries about long waits.

“I saw many friends were posting pictures of themselves successfully ordering the iPhone X, so I canceled mine,” said Tony Tong, 29, a product manager at a tech firm in Beijing, who said he had ordered four phones in the hope of re-selling them for a profit. “The environment is bad for scalpers.”

Apple will hope payment plans and easy access to online credit in China will persuade people to buy.

Wang Hao, a 24-year-old engineer in the northeastern port city of Dalian, said he ordered the new phone despite the high price tag. His last phone was an iPhone 6S.

“The cost is about a month’s salary for me,” he told Reuters. “But I’m just used to it now, and there wasn’t really anything to make me choose another brand.” (VOA)

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iPhone X gets 35% of total handset industry profits in Q4 2017

Apple and Samsung flagship models lead in terms of profits as compared to other OEMs

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Apple got lukewarm response for iPhone X. Pixabay
Apple's music sees high streaming of Cardi B's new album. Pixabay

As global handset profits dipped 1 per cent (year-on-year) in the fourth quarter of 2017, Apple X alone generated 35 per cent of the total handset industry profits, helping the iPhone maker grow 1 per cent (YoY) in the same quarter, a new report said on Tuesday.

According to the latest research from Counterpoint’s Q4 2017, the premium smartphone market did not grow as expected while Apple remained the most profitable brand, capturing 86 per cent of the total handset market profits.

Apple is also working on the new iPhone. IANS

“Apple grew 1 per cent (YoY) even with the iPhone X being available for only two months in Q4 2017. The iPhone X alone generated 21 per cent of total industry revenue and 35 per cent of total industry profits during the quarter,” Research Analyst Karn Chauhan said in a statement.

“The share of iPhone X is likely to grow as it advances further into its life-cycle. Additionally, the longer shelf life of all iPhones ensured that Apple still has eight out of top 10 smartphones, including its three-year-old models, generating the most profits compared to current competing smartphones from other OEMs,” Chauhan informed.

The global smartphone market has already reached its peak with longer replacement cycles and key smartphone OEMs are now under pressure to book profits. “Chinese OEMs cumulative profits crossed $1.3 billion during Q4 2017. This was driven by the increased mix of mid to high-end smartphones. In fact, the average selling price (ASP) of their flagship devices also increased YoY,” added Associate Director Tarun Pathak.

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Key Chinese players like Huawei, OPPO and Vivo are now looking to scale up the price band, by leveraging their inhouse manufacturing capabilities and bringing innovation to their devices, he added. iPhone X generated 5 times more profits than the combined profits of over 600 Android OEMs during Q4 2017.

Apple and Samsung flagship models lead in terms of profits as compared to other OEMs. Huawei was the leading brand among all the Chinese brands, with profit increasing 59 per cent (YoY). “With an increased mix of flagship sales for key Chinese brands, we expect profit share of Chinese players to grow in the coming quarters,” the report added. IANS